Gurugram, Hyderabad, Bengaluru, Chennai record double-digit growth in prices for residential plots
The demand for plots and independent floors has staged a strong comeback during the pandemic outstripping apartments.
Prices of residential plots have clocked a compound annual growth rate (CAGR) of 7 per cent since 2015 across eight major cities, while rates of apartments grew 2 per cent (CAGR) during the period, research by the REA India, which owns full stack digital real estate platform Housing.com, showed.
“Residential plots have been able to generate higher returns on investment. One of the reasons could be the limited supply of plots in big cities because of a paucity of large land parcels,” said Dhruv Agarwala, CEO, Housing.com, Makaan.com and PropTiger.com.
“The demand for plots and independent floors has come back. Developers are trying to meet this rise in demand by launching such projects on the outskirts of big cities,” Agarwala said.
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In eight major cities — Delhi-NCR, Mumbai, Pune, Bengaluru, Hyderabad, Chennai, Kolkata and Ahmedabad – people generally prefer to buy apartments rather than plots. The reasons behind the popularity of flats are security and common amenities like power backup, car parking, club, gym, swimming pool and garden area, among others.
Despite higher demand for flats in these eight cities, current and historical trends suggest that plots are clocking higher returns than other residential assets.
Ankita Sood, head of research at Housing.com, Makaan.com and PropTiger.com, said, “We saw key localities in Gurugram and the southern sisters of Hyderabad, Bengaluru, and Chennai recording double-digit growth in prices for residential plots especially after 2018. Where prices for land in these cities grew in the range of 13-21 percent in the last three years, apartment prices have remained range-bound (2-6 percent). Positive sentiments induced by policy changes and the pandemic will further fuel this demand in coming quarters.”
Southern cities leading demand for residential plots
During 2018-2021, Hyderabad witnessed the most price appreciation in plots clocking 21 percent CAGR.
Shankarpalli and Patancheru in the West and Tukkuguda, Maheshwaram and Shadnagar in the South were top locations in Hyderabad in terms of both demand and price appreciation in 2021.
In Chennai, the rates of residential plots prices grew at a CAGR of 18 percent between 2018 and 2021. Last year, Ambattur, Avadi and Oragadam, Sriperumbudur and Thaiyur witnessed the most price appreciation in Chennai.
The residential land prices in Bengaluru increased at a CAGR of 13 percent between 2018 and 2021.
In the IT city, micro markets such as Neelmangala, Devanhalli, Chikballapur, in the north, Hoskote in east, followed by Kombalgodu in the south were major destinations for residential plots.
Gurugram leads in the North
In the Gurugram market in Delhi-NCR, prices for residential plots grew at 15 per cent CAGR between 2018 and 2021. The land prices in Sohna, Gurugram clocked 6 per cent CAGR during the period.
Sector 99 and Sector 108 along Dwarka Expressway, Sector 95A in New Gurugram and Sector 70A and Sector 63 were major destinations for residential land in Gurugram in both demand and price appreciation in 2021.
In Sohna, Karnki, Sector 14 Sohna and Sector 5 Sohna were prominent localities last year. The supply of plots in Gurugram is high because of policy-based initiatives by the Haryana government.
Another report by Magicbricks had found last year that homebuyers’ appetite for plots has been growing at a rapid pace, resulting in a significant demand rise that today stands almost on a par with that for apartments. The survey found that apartments were the most preferred choice with 36% respondents voting for them, while plots emerged as the second most preferred asset with 34% votes. Around 20% of the respondents voted for independent houses and 10% for villas.
Post-COVID consumer trends on Magicbricks suggest that the demand for plots has been on the rise as homebuyers look for more space to accommodate the rising needs for a home office.
Residential markets with big infrastructure projects such as metro, airport, highway, and rail connectivity are witnessing huge demand for plots. Demand on Magicbricks reflects that Bengaluru, Hyderabad, Chennai, Pune, and Lucknow have been witnessing the most demand. In terms of most supply, Hyderabad, Chennai, Lucknow, Gurgaon, and Pune top the charts.
In terms of localities, Yamuna Expressway (Greater Noida), Vishweshwaraiah Layout (Bangalore), Sultanpur Road (Lucknow), Mokila (Hyderabad), and Shamshabad (Hyderabad) have been witnessing a rise in demand. Shadnagar (Hyderabad), Yamuna Expressway (Greater Noida), Devanahalli (Bangalore), Sultanpur Road (Lucknow), and Sangareddy (Hyderabad) are the localities with most supplies, the survey had found.
